 | |
| Company type | Public |
|---|---|
| NYSE: BSC | |
| Industry | Investment services |
| Founded | May 1, 1923 |
| Defunct | March 16, 2008[1] |
| Fate | Acquired by JPMorgan Chase |
| Successor | JPMorgan Chase |
| Headquarters | New York City, New York, U.S. |
Key people | Alan Schwartz, former CEO James Cayne, former chairman and CEO David Robert Malpass, chief economist for the last six years before its failure |
| Products | Financial services Investment banking Investment management |
| Website | bear.com |
The Bear Stearns Companies, Inc. was an American investment bank, securities trading, and brokerage firm that failed in 2008 during the 2007–2008 financial crisis and the Great Recession. After its closure it was subsequently sold to JPMorgan Chase. The company's main business areas before its failure were capital markets, investment banking, wealth management, and global clearing services, and it was heavily involved in the subprime mortgage crisis.
In the years leading up to the failure, Bear Stearns was heavily involved in securitization and issued large amounts of asset-backed securities which were, in the case of mortgages, pioneered by Lewis Ranieri, "the father of mortgage securities."[2] As investor losses mounted in those markets in 2006 and 2007, the company actually increased its exposure, especially to the mortgage-backed assets that were central to the subprime mortgage crisis. In March 2008, the Federal Reserve Bank of New York provided an emergency loan to try to avert a sudden collapse of the company. The company could not be saved, however, and was sold to JPMorgan Chase for $10 per share,[3] a price far below its pre-crisis 52-week high of $133.20 per share, but not as low as the $2 per share originally agreed upon.[4]
The collapse of the company was a prelude to the 2007–2008 financial crisis and the meltdown of the investment banking industry in the United States and elsewhere. In January 2010, JPMorgan ceased using the Bear Stearns name.[5]
- ^ "Bear Stearns collapses, sold to J.P. Morgan Chase". History.com. A&E Television Networks. January 19, 2018. Retrieved June 28, 2023.
- ^ Lowenstein, Roger The End of Wall Street, Penguin Press 2010, pp.xvii,22 ISBN 978-1-59420-239-1
- ^ Sorkin, Andrew Ross (March 24, 2008). "JPMorgan Raises Bid for Bear Stearns to $10 a Share". The New York Times. ISSN 0362-4331. Retrieved March 16, 2018.
- ^ Ross, Andrew (March 17, 2008). "JP Morgan Pays $2 a Share for Bear Stearns". The New York Times. Retrieved on September 30, 2008.
- ^ Bear Stearns Brand Finally Fades, Two Years After Collapse